Get the free Form 6252

This form is used to report income from casual sales of real or personal property conducted through installment sale agreements, where payments may extend into subsequent tax years.

How to fill out form 6252

How to fill out Form 6252

1. Begin by obtaining Form 6252 from the IRS website or your local IRS office.
2. Enter your name and Social Security number at the top of the form.
3. Provide the date of the sale of the property in line 1.
4. In line 2, report the sales price of the property.
5. Fill in your adjusted basis in line 3, detailing what you originally paid for the property plus any improvements.
6. Calculate the gain on the sale in line 4 by subtracting your adjusted basis from the sales price.
7. If applicable, enter the amount of any selling expenses in line 5.
8. Calculate the reportable installment sale gain in line 6 based on the amount received in the year of sale.
9. Complete the relevant sections of the form detailing any installment payments received in subsequent years.
10. Review the completed form for accuracy and submit it with your tax return.

Who needs Form 6252?

1. Form 6252 is needed by taxpayers who sell property and receive payment in installments over multiple years.
2. It is commonly used by individuals and businesses that engage in installment sales, such as property sales, to report income.

People Also Ask about

Does TurboTax support Form 6252?

Yes, TurboTax will fill out the 6252 and then carry the numbers to any other necessary forms including schedule D.

What qualifies for installment sale treatment?

For federal income tax purposes, an installment sale is when at least one payment of proceeds from an eligible sale is deferred until after the end of the tax year in which the sale occurs. This setup can be beneficial for a buyer that doesn't have enough available cash to immediately pay the full purchase price.

What is Form 6252 TurboTax?

Form 6252 helps you figure out how much of the money you received during a given tax year was a return of capital, how much was a gain and how much was interest. You can then report the proper amounts on your tax return.

What does not qualify for an installment sale?

Certain types of sales don't qualify as installment sales, including: Sale of inventory items. Sales made by dealers who regularly sell the same type of property. Sale of stocks or other investment securities.

Which types of sales are reported on IRS Form 6252?

Generally, you will use Form 6252 to report installment sale income from casual sales of real or personal property during the tax year. You will also have to report the installment sale income on Schedule D (Form 1040), Form 4797, or both.

How do I report a rental property installment sale?

What Tax Form Should I Use to Report Interest Income From an Installment Sale? You will use Form 6252, Installment Sale Income, to report installment sale interest income. The information from Form 6252 flows through to Schedule D, Capital Gains and Losses, which flows through to your Form 1040.

What is IRS Form 6252 used for?

Use Form 6252 to report an installment sale under the installment method. File Form 6252 for the year of the disposition and all subsequent years, regardless of whether a payment is received in such year, until and including the year final payment is received or the obligation is disposed of.

Who benefits from an installment sale?

One of the biggest benefits of an installment sale is that it helps the buyer place themselves into a lower tax bracket. The sale of some sizable property or property of sizable value — whether it's commercial real estate or residential real estate — can bump an investor into a tax bracket they'd like to avoid.

For pdfFiller’s FAQs

What is Form 6252?

Form 6252 is a tax form used by taxpayers to report income from the sale of certain types of property under the installment method.

Who is required to file Form 6252?

Taxpayers who sell property and receive payments over time, rather than in a lump sum, are required to file Form 6252.

How to fill out Form 6252?

To fill out Form 6252, you must enter details about the sale, including the sale price, the basis of the property, and the payments received during the year.

What is the purpose of Form 6252?

The purpose of Form 6252 is to report the income from the sale of property when payments are received in installments, ensuring the proper tax treatment of that income.

What information must be reported on Form 6252?

Form 6252 requires information such as the description of the property sold, the selling price, the seller's basis in the property, and details of payments received.